2011 CIA World Factbook 2011, available at https://www.cia.gov/library/publications/the-world-factbook/elds/2012.html
Europe. Rather, it is the partner with whom achieving acompromise has the greatest overall impact on EU policy.
The euro crisis has reaffirmed the relevance of the Franco-German tandem and changed its internal dynamics. Theseare now harder to read and more difficult to manage.For decades, there was what Stanley Hoffmann calledthe “symmetry of asymmetry” between a France that wasperceived to lead in political terms and a West Germany that was stronger in the economic sphere, which worked asa stabilising feature of the duo. In reality, Germany shapedthe EU politically at least as much as France, and Frencheconomic growth averages often matched and occasionally outperformed Germany’s. But the sense of balance that arosefrom a politically confident France and an economically confident Germany helped the couple through numerouspower battles.Even more than German reunification, the Treaty of Nicedealt a first big blow to this equilibrium by ending the mostpowerful expression of institutional equality between thetwo, namely their similar share of votes in EU Councilformations. Since then, an increasing divergence of economic performance has reinforced a sense of growingdisparity. Germany, having reformed its welfare state andlabour laws and overcome the long crisis resulting fromintegrating the bankrupt GDR, has strengthened its primacy as the EU’s most successful big economy. France, of course,is not a weak power: as a military nation ready to engageoverseas and a veto-wielding member of the United NationsSecurity Council, it has preserved global stature. Moreover,thanks to the shrewd eurozone crisis management of Sarkozy, France managed to escape the Italian and Spanishcontagion scenarios and the downward economic spiral thatensued for these countries. Yet a rapid shrinking of France’s industrial fabric,accelerated by the rise in the euro’s external exchangerate, has fed a sense of anxiety and dispossession, withglobalisation publicly debated as a threat rather than asan opportunity. Germany, whose industrial base is ideally structured to meet the demand of countries such as China,still produces close to 30 percent of its GDP in the industrialsector, whereas the figure for France has dwindled to lessthan 20 percent.
France lacks small and medium-sizedenterprises able to compete on a global scale; Germany hasroughly a thousand of them. They deliver wealth to ruralareas and act as economic and entrepreneurial educators forthe population, showing that global entrepreneurial successis achievable even for small companies located in rural partsof the country.In France, hardly a week goes by without reports of yetanother closure of a factory or company. Unsurprisingly, when French interlocutors are asked about the prospectsfor their country’s relationship with Germany, the fear of
(economic decoupling) is a recurrent theme.
The only structural economic factor bolstering French self-confidence when the country looks across the Rhine is itsmuch healthier demography. But this does little to counterthe prevailing sense of angst in France. The French havethe feeling that they are “no longer on the same eye-level asthe Germans”, a French observer said.The euro crisis has exacerbated the sense of fragility. Franceobjectively faces a far greater risk than Germany that themarkets will lose confidence in its ability to refinance itsdebt. This reduces France’s room for manoeuvre andmakes it imperative to French policymakers to sustain theperception that they form part of a bloc with Germany ratherthan with Italy or Spain. The political consequences forFrance are real, but the tendency in Europe and in Franceitself has been to overstate them to the point of distortion.There is a widespread perception that until the election of François Hollande, Germany alone has called all the shotsin the crisis, forcing France and others to subscribe to theGerman vision of how to manage the eurozone.
But this isnot how things are seen in Berlin.The fact is that Germany has seen several of its sacredcows led to the ideological abattoir during this crisis;
(Germany’s best-selling tabloid) stirred up popular emotion whenever another such sacrifice became inevitable. Forexample, the creation of the European Financial Stability Facility (EFSF) and the European Stability Mechanism(ESM) amounted to an implicit recognition that financialsolidarity for debt-laden countries under massive pressurefrom the financial markets must be a permanent featureof Europe’s monetary union – a de facto breach of the“no bailout” principle enshrined in the EU treaties atGermany’s insistence. The self-reinvention of the ECB asa guardian of financial stability, expanding its mandate tosave banks from collapse and facilitate the refinancing of otherwise bankrupt states, was another blow to Germany’spsyche – and a move seen by many citizens as a further betrayal of the promises made when the euro replaced thedeutschmark in 1999: most Germans want their central bank to focus on fighting inflation.More recently, statements by Bundesbank President Jens Weidmann and Finance Minister Wolfgang Schäuble thatGermany must accept a little higher inflation to balance theEuropean South’s loss of competitiveness dealt yet another
The authors interviewed more than a dozen leading politicians, civil servants, mediarepresentatives and researchers in France and in Germany for this paper.
See, for example, Ifop, “L’image de l’Allemagne en France”, no. 19787, January 2012;Gerrit Wiesmann and Ralph Atkins, “Schäuble ready to tolerate German ination”,
, 10 March 2012, available at http://www.ft.com/cms/s/0/49e9e708-9abe-11e1-94d7-00144feabdc0.html#axzz1usPB7eor (accessed 15 May 2012).